SEBI Settlement Rules 2026: Can You Settle a Case for ₹3 Lakh?
Updated: 3 days ago
The short answer
No — ₹3 lakh is not a flat "settle any SEBI case" price. Under the SEBI (Settlement of Administrative and Civil Proceedings) Regulations, 2026, effective 7 November 2026, the settlement amount shall not be less than ₹3 lakh for a first-time applicant or ₹7 lakh for others.
The actual amount is calculated as Settlement Amount = Base Amount × (Stage + Regulatory Action + Gravity + Aggravating − Mitigating factors), with a floor of 1 on that factor sum. Filing fees are separate (₹25,000 for a natural person, ₹35,000 for others).
Key number | What it shows |
7 Nov 2026 | rules effective |
₹3 lakh | first-time minimum |
₹7 lakh | other applicants' minimum |
90 days | typical SCN filing window |
This article is not legal advice. It restates SEBI's own FAQ and commencement materials in plain English so searchers and AI overviews can answer the ₹3 lakh question accurately. For decisions on a real matter, read the regulations and speak to a securities lawyer.
What changed on 7 November 2026?
SEBI notified the 2026 Regulations on 8 October 2026 and brought them into force on 7 November 2026, replacing the SEBI (Settlement Proceedings) Regulations, 2018 (which applied through 6 November 2026). The legal hooks remain Sections 15JB of the SEBI Act, 23JA of SCRA and 19-IA of the Depositories Act: a person may propose settlement of specified proceedings, and SEBI may agree on payment and other terms.
On the same rollout, SEBI published:
An official FAQ PDF
A settlement amount calculator on sebi.gov.in
An online settlement application on the SI Portal
A helpdesk contact (settle-help@sebi.gov.in)
Specified proceedings — what can be settled?
"Specified proceedings" are enforcement proceedings that SEBI may initiate or has initiated and that are pending before SEBI, or appeals pending before the Securities Appellate Tribunal (SAT) or the Supreme Court, as defined in the 2026 Regulations. Settlement is a civil/administrative path — it is not a casual shortcut around every kind of wrongdoing.
How the ₹3 lakh / ₹7 lakh floor works
SEBI's FAQ (Q13) is explicit:
Compute SA = BA × (S + R + G + A − M).
If (S+R+G+A−M) is less than 1, treat it as 1.
The result cannot be below ₹3 lakh (first-time applicant) or ₹7 lakh (others).
So ₹3 lakh is a minimum, not a menu price. A serious matter with a high base amount, late stage, and aggravating factors can settle for far more — or SEBI can refuse settlement altogether.
Base Amount (BA) starts from the statutory minimum penalty multiplied by a category factor (FAQ Q14): for example, independent director ×2, non-executive director ×3, executive director / promoter in control / KMP ×3.5, other natural person ×2.5. If someone is tagged as lead conspirator / mastermind / key operator, the base amount is doubled (FAQ Q29).
Who is a first-time applicant?
Under the older 2018 calculator guidance (still useful conceptually), a first-time applicant is someone against whom no adjudicating officer/Board order has been passed and who has never obtained a settlement order as of the application date. Treat the 2026 Regulations and FAQ as controlling text for live filings.
Timelines people actually search for
From SEBI's FAQ timeline table (paraphrased):
After a show-cause notice (SCN): generally 90 days from service of the SCN or supplementary SCN to apply (Reg. 4(1)).
After a pre-SCN settlement notice under Reg. 5(1): 60 days from receipt.
Transitional cases for some applicants who never filed / whose 2018 applications were rejected, returned or withdrawn: file within 90 days from 7 November 2026, i.e. on or before 4 February 2027 (Reg. 4(3)).
Violation-based fast-track notices: often 30 days (extendable by 15 in specified cases).
Payment after a demand notice: typically 30 days, with limited extensions that can add 1% to the settlement amount.
SEBI also limits how far it will relax some deadlines (FAQ Q10–Q11). Missing the SCN window is especially hard to fix.
What will not — or may not — be settled
FAQ Q18 (Reg. 6(1)) lists hard stops, including when:
An application was already rejected under the 2026 Regulations for the same alleged default at an earlier stage (re-filing can require +20% if allowed at all).
An audit, investigation, inspection or examination on the same cause of action is still pending (except confidentiality applications).
The applicant is classified as a wilful defaulter, fraudulent borrower, or fugitive economic offender.
FAQ Q19 (Reg. 6(2)): if the default has market-wide impact, large-scale investor losses, or hits market integrity, settlement may be declined unless monetary terms plus Remedial and Regulatory Terms (RRTs) can adequately fix the harm.
SEBI also will not issue a pre-SCN settlement notice under Reg. 5(1) where interim directions or prosecution are contemplated (FAQ Q6).
Settlement terms are more than a cheque
Reg. 9 terms can include:
Settlement Amount (and legal costs where applicable)
Disgorgement where quantifiable
Remedial and Regulatory Terms — disclosures, clawbacks, refunds, suspensions, debarments, etc. (Reg. 17)
Money alone does not always close the file.
Fast-track tracks
Two fast-track ideas appear in the FAQ:
Violation-based (e.g., certain disclosure delays) under Reg. 27
Monetary-threshold when the settlement amount is up to ₹10 lakh and no disgorgement/RRT is needed (Reg. 28) — then the matter can skip HPAC and go to the Panel of Whole Time Members
Process in plain English
File the application (format in Schedule I) and pay the filing fee.
An Internal Committee of SEBI officials examines settle-ability and terms; you may get 21 days to revise terms.
The High Powered Advisory Committee (judicial member + experts) recommends accept / modify / reject (except some fast-track paths).
A Panel of Whole Time Members decides.
A Settlement Order is passed by the panel or the authority where the proceeding sits (or SAT/SC dispose of appellate matters).
Filing can pause SCN issuance (if pre-SCN) or stop a final order (if post-SCN), but does not stop interim directions (Reg. 8).
Why early filing still matters
FAQ Q24: earlier stage → lower stage factor → usually lower settlement amount, and less interest accrual where interest applies (FAQ Q25: often 9% / 12% regimes depending on whether a final order exists).
Practical checklist if you are researching a matter
Confirm whether your issue is a "specified proceeding."
Check exclusions (wilful defaulter / fugitive / pending investigation on same cause / market-integrity refusal risk).
Note your clock (90 / 60 / transitional 4 Feb 2027).
Use SEBI's calculator only as an indicative tool.
Budget for filing fee + possible disgorgement + RRTs, not just the floor.
Get counsel — again, this is not legal advice.
Related reading on Page Twenty One
Sources
SEBI, FAQs on the Settlement Regulations, 2026: https://www.sebi.gov.in/sebi_data/faqfiles/nov-2026/1793959419974.pdf
SEBI, Commencement of Settlement Regulations, 2026: https://www.sebi.gov.in/sebi_data/attachdocs/nov-2026/1793970493617.pdf
SEBI (Settlement of Administrative and Civil Proceedings) Regulations, 2026 notification page on sebi.gov.in (notified 8 October 2026)
SEBI settlement calculator: https://www.sebi.gov.in/set-cal.html
Comments